<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
REYNOLDS METALS COMPANY
- --------------------------------------------------------------------------------
(Name of issuer)
COMMON STOCK, no par value
- --------------------------------------------------------------------------------
(Title of class of securities)
761763 101
-------------------------------------------------------
(CUSIP number)
Highfields Capital Management LP
Attention: Kenneth H. Colburn
200 Clarendon Street
51st Floor
Boston, MA 02117
(617) 850-7500
- --------------------------------------------------------------------------------
(Name, address and telephone number of person authorized to receive notices and
communications)
August 11, 1999
- -------------------------------------------------------------------------------
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
(Continued on the following pages)
(Page 1 of 11 Pages)
__________________________
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act.
<PAGE>
SCHEDULE 13D/A
- ----------------------- ---------------------
CUSIP NO. 761763 101 PAGE 2 OF 11 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Highfields Capital Management LP
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
4,339,900
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY None
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
4,339,900
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
None
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
4,339,900
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
6.7%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
PN
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D/A
- ----------------------- ---------------------
CUSIP NO. 761763 101 PAGE 3 OF 11 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Highfields GP LLC
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
AF
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
4,339,900
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY None
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
4,339,900
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
None
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
4,339,900
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
6.7%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
OO
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D/A
- ----------------------- ---------------------
CUSIP NO. 761763 101 PAGE 4 OF 11 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Jonathon S. Jacobson
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
AF
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
4,339,900
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY None
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
4,339,900
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
None
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
4,339,900
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
6.7%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D/A
- ----------------------- ---------------------
CUSIP NO. 761763 101 PAGE 5 OF 11 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Richard L. Grubman
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
AF
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
4,339,900
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY None
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
4,339,900
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
None
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
4,339,900
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
6.7%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
Cusip No. 761763 101 Page 6 of 11 pages
This Amendment No. 2 to Schedule 13D (this "Amendment No. 2") should be read in
conjunction with the Schedule 13D filed with the Securities and Exchange
Commission on March 17, 1999 (the "Schedule 13D"), as amended by Amendment No. 1
to the Schedule 13D filed on June 23, 1999, by Highfields Capital Management LP,
Highfields GP LLC, Jonathon S. Jacobson and Richard L. Grubman relating to the
shares of common stock, no par value (the "Shares"), of Reynolds Metals Company
(the "Company"). This Amendment No. 2 amends and restates the Schedule 13D with
respect to Items 3, 5 and 7. All other information in the Schedule 13D shall
remain in effect. All capitalized terms used herein and not otherwise defined
shall have the meanings ascribed thereto in the Schedule 13D.
This Amendment No. 2 is being filed to include as exhibits to the Schedule
13D the following correspondence between Highfields Capital Management and
the Company: (i) letter dated August 10, 1999 from Highfields Capital Management
to each of the directors of the Company (other than William H. Joyce)
concerning the Company's unwillingness to explore a sale of the Company as an
alternative for maximizing shareholder value; (ii) letter dated August 10, 1999
from Highfields Capital Management to William H. Joyce concerning the
Company's unwillingness to explore a sale of the Company as an alternative for
maximizing shareholder value; and (iii) letter dated August 11, 1999 from
Highfields Capital Management to each of the directors of the Company
concerning the proposal by Alcoa Inc. to acquire the Company.
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
The aggregate purchase price of the 422,623 Shares owned by Highfields
I was $21,575,907.95 inclusive of brokerage commissions.
The aggregate purchase price of the 804,530 Shares owned by Highfields
II was $40,725,465.02, inclusive of brokerage commissions.
The aggregate purchase price of the 3,112,747 Shares owned by
Highfields Ltd. was $159,405,890.46, inclusive of brokerage commissions.
Each of Highfields I, Highfields II and Highfields Ltd. used their own
assets to purchase such Shares, which may at any given time include funds
borrowed in the ordinary course in their margin accounts.
Item 5. Interest in Securities of Issuer.
--------------------------------
(a) and (b) As of August 11, 1999, Highfields I, Highfields II and
Highfields Ltd. owned beneficially 422,623, 804,530 and 3,112,747 Shares,
respectively, representing approximately 0.65%, 1.2% and 4.8%, respectively, of
the 64,507,259 Shares outstanding as reported in the Company's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1999 (the "Form 10-Q").
As of August 11, 1999, Highfields Capital Management in its capacity
as investment manager of the Funds, had sole voting and dispositive power with
respect to all 4,339,900 Shares owned beneficially by the Funds, representing
approximately 6.7% of the 64,507,259 Shares outstanding as reported in the Form
10-Q.
As of August 11, 1999, Highfields GP, through its control of
Highfields Capital Management, had sole voting and dispositive power with
respect to all 4,339,900 Shares owned beneficially by Highfields Capital
Management, representing approximately 6.7% of the 64,507,259 Shares outstanding
as reported in the Form 10-Q.
As of August 11, 1999, Mr. Grubman, as a Managing Member of Highfields
GP, had sole voting and dispositive power with respect to all 4,339,900 Shares
owned beneficially by Highfields GP, representing approximately 6.7% of the
64,507,259 Shares outstanding as reported in the Form 10-Q.
As of August 11, 1999, Mr. Jacobson, as a Managing Member of
Highfields GP, had sole voting and dispositive power with respect to all
4,339,900 Shares owned beneficially by Highfields GP, representing approximately
6.7% of the 64,507,259 Shares outstanding as reported in the Form 10-Q.
<PAGE>
Cusip No. 761763 101 Page 7 of 11 pages
(c) Information with respect to all transactions in the Shares
beneficially owned by the Reporting Persons which were effected during the past
sixty days is set forth in Schedule A hereto and incorporated herein by
reference.
(d) None.
(e) Not applicable.
Item 7. Material to be Filed as Exhibits.
--------------------------------
Exhibit 99.1* - Letters from Highfields to the Company, dated
-------------
February 16, 1999.
Exhibit 99.2* - Letter from the Company to Highfields, dated
-------------
February 25, 1999.
Exhibit 99.3* - Letter from the Company to the Securities and Exchange
-------------
Commission, dated March 1, 1999.
Exhibit 99.4* - Letter from Highfields to the Company, dated
-------------
March 1, 1999.
Exhibit 99.5* - Letter from Highfields to the Company, dated
-------------
March 5, 1999.
Exhibit 99.6** - Letter from Highfields to the Company, dated June 23,
------------
1999.
Exhibit 99.7 - Form of letter from Highfields to the
------------
Directors of the Company, dated August 10, 1999.
Exhibit 99.8 - Letter from Highfields to Mr. William H. Joyce,
------------
Director of the Company, dated August 10, 1999.
Exhibit 99.9 - Letter from Highfields to the Directors of the
------------
Company, dated August 11, 1999.
*Previously filed in Schedule 13D dated March 17, 1999
**Previously filed in Amendment No. 1 to Schedule 13D dated June 23, 1999
<PAGE>
Cusip No. 761763 101 Page 8 of 11 pages
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: August 11, 1999 HIGHFIELDS CAPITAL MANAGEMENT LP
By: Highfields GP LLC, its General Partner
By: /s/ Richard L. Grubman
--------------------------------------
Richard L. Grubman
Managing Member
HIGHFIELDS GP LLC
By: /s/ Richard L. Grubman
--------------------------------------
Richard L. Grubman
Managing Member
RICHARD L. GRUBMAN
/s/ Richard L. Grubman
--------------------------------------
JONATHON S. JACOBSON
/s/ Jonathon S. Jacobson
--------------------------------------
<PAGE>
Cusip No. 761763 101 Page 9 of 11 pages
Schedule A
----------
INFORMATION WITH RESPECT TO TRANSACTIONS
OF THE REGISTRANT'S COMMON STOCK
BY HIGHFIELDS I DURING THE PAST SIXTY DAYS
Number of Shares of
Common Stock
Date Purchased/(Sold)/1/ Price Per Share
---- ------------------- ---------------
6/24/99 1,443 55.9958
6/30/99 4,446 59.0300
8/11/99 34,090 65.8307
Total: 39,979 ---
<PAGE>
Cusip No. 761763 101 Page 10 of 11 pages
INFORMATION WITH RESPECT TO TRANSACTIONS
OF THE REGISTRANT'S COMMON STOCK
BY HIGHFIELDS II DURING THE PAST SIXTY DAYS
Number of Shares of
Common Stock
Date Purchased/(Sold)/1/ Price Per Share
---- ------------------- ---------------
6/24/99 2,353 55.9958
6/30/99 7,864 59.0300
8/11/99 64,785 65.8307
Total: 75,002 ---
<PAGE>
Cusip No. 761763 101 Page 11 of 11 pages
INFORMATION WITH RESPECT TO TRANSACTIONS
OF THE REGISTRANT'S COMMON STOCK
BY HIGHFIELDS LTD. DURING THE PAST SIXTY DAYS
Number of Shares of
Common Stock
Date Purchased/(Sold)/1/ Price Per Share
---- ------------------- ---------------
6/24/99 7,204 55.9958
6/30/99 21,090 59.0300
8/11/99 251,125 65.8307
Total: 279,419 ---
/1/ All transactions were effected through open market or privately negotiated
purchases
<PAGE>
EXHIBIT 99.7
[FORM OF LETTER SENT TO ALL DIRECTORS OF REYNOLDS METALS COMPANY]
August 10, 1999
Mr. James M. Ringler
Chairman
Premark International Inc.
1717 Deerfield Road
Deerfield, IL 60015
Dear Mr. Ringler,
As you may be aware, Messrs. Sheehan, Leahey and Taylor of Reynolds Metals
Company recently visited our offices. At that meeting, Jerry confirmed that, of
the various alternatives the company is currently considering to maximize
shareholder value, a sale of the company is not among them. This is despite the
fact that we, the company's largest shareholder, and a large number of the
company's other major institutional investors, have been asking for months that
Merrill Lynch's mandate be expanded to include soliciting potential buyers of
all or some of the company.
You may not be aware that after Reynolds' recent analyst meeting in New York, an
impromptu gathering of over fifteen of the company's largest shareholders took
place at which many of us expressed dissatisfaction with the company's
unwillingness to explore a sale. We believe that Jerry's comments and press
releases concerning acquisitions and a `merger of equals' are inconsistent with
what Reynolds' owners want and would encourage you to independently verify this.
In defending the company's current posture, Jerry points to the fact that many
companies that might garner a premium in a sale are not put up for sale.
However, unlike most of those companies, Reynolds remains a chronic
underperformer; in the latest quarter approximately one-third of revenues had a
negligible contribution to profits and corporate overhead is still running at
$34 million per quarter. To say that a sale is an option that should not even
be explored at this time is ridiculous for a company in two large, disparate
businesses with Reynolds' track record. The owners who gathered in New York
expressed extreme frustration with this posture and the company's dramatic
undervaluation in the marketplace that a sale might rectify. You should know
that the tenor of that meeting was completely inconsistent with management's
claim of having received supportive comments from some shareholders. Your
fellow director Mr. Joyce recently chose to explore and ultimately consummate a
sale (not a `merger of equals', whatever that means) at a substantial premium
which Union Carbide shareholders are applauding as a tremendous value-realizing
event. Reynolds' reluctance to even consider this option is incomprehensible.
<PAGE>
As Jerry may have already indicated, we expressed a desire to meet with
Reynolds' Executive Committee. We think that this is not an unreasonable
request from your largest shareholder. For your convenience we are willing to
come to Richmond at the time of your next board meeting, which Jerry indicated
is later this month, and are also willing to participate in such a meeting with
representatives of one or more other owners.
We look forward to your response.
Sincerely,
/s/ Richard L. Grubman
Richard L. Grubman
Managing Director
P.S. Today's reports of the possible merger of Alcan, Pechiney and Algroup even
further underscore the need for Reynolds to be aggressively proactive in
exploring a sale of the company now.
cc: Jeremiah J. Sheehan
<PAGE>
EXHIBIT 99.8
August 10, 1999
Mr. William H. Joyce
Union Carbide Corporation
Chairman, President and CEO
39 Old Ridgebury Road
Danbury, CT 06817-0001
Dear Mr. Joyce,
As you may be aware, Messrs. Sheehan, Leahey and Taylor of Reynolds Metals
Company recently visited our offices. At that meeting, Jerry confirmed that, of
the various alternatives the company is currently considering to maximize
shareholder value, a sale of the company is not among them. This is despite the
fact that we, the company's largest shareholder, and a large number of the
company's other major institutional investors, have been asking for months that
Merrill Lynch's mandate be expanded to include soliciting potential buyers of
all or some of the company.
You may not be aware that after Reynolds' recent analyst meeting in New York, an
impromptu gathering of over fifteen of the company's largest shareholders took
place at which many of us expressed dissatisfaction with the company's
unwillingness to explore a sale. We believe that Jerry's comments and press
releases concerning acquisitions and a `merger of equals' are inconsistent with
what Reynolds' owners want and would encourage you to independently verify this.
In defending the company's current posture, Jerry points to the fact that many
companies that might garner a premium in a sale are not put up for sale.
However, unlike most of those companies, Reynolds remains a chronic
underperformer; in the latest quarter approximately one-third of revenues had a
negligible contribution to profits and corporate overhead is still running at
$34 million per quarter. To say that a sale is an option that should not even be
explored at this time is ridiculous for a company in two large, disparate
businesses with Reynolds' track record. The owners who gathered in New York
expressed extreme frustration with this posture and the company's dramatic
undervaluation in the marketplace that a sale might rectify. You should know
that the tenor of that meeting was completely inconsistent with management's
claim of having received supportive comments from some shareholders. We
congratulate you on your recent decision to explore and ultimately consummate a
sale (not a `merger of equals', whatever that means) at a substantial premium as
a means for unlocking tremendous value compared with the status quo for your
shareholders at Union Carbide. Reynolds' reluctance to even consider this option
is incomprehensible.
<PAGE>
As Jerry may have already indicated, we expressed a desire to meet with
Reynolds' Executive Committee. We think that this is not an unreasonable
request from your largest shareholder. For your convenience we are willing to
come to Richmond at the time of your next board meeting, which Jerry indicated
is later this month, and are also willing to participate in such a meeting with
representatives of one or more other owners.
We look forward to your response.
Sincerely,
/s/ Richard L. Grubman
Richard L. Grubman
Managing Director
P.S. Today's reports of the possible merger of Alcan, Pechiney and Algroup even
further underscore the need for Reynolds to be aggressively proactive in
exploring a sale of the company now.
cc: Jeremiah J. Sheehan
<PAGE>
EXHIBIT 99.9
[FORM OF LETTER SENT TO ALL DIRECTORS OF REYNOLDS METALS COMPANY]
August 11, 1999
Mr. Jeremiah J. Sheehan
Chairman
Reynolds Metals Company
6601 West Broad Street
Richmond, VA 23261-7003
Dear Jerry,
It should now be clear that your exclusive duty on behalf of Reynolds'
shareholders is to auction the company to the highest bidder, whether Alcoa or
another company. We and your other large shareholders have been pushing you to
explore a sale of the company since early this year. Unbeknownst to us, Alcoa
made a written proposal in March to acquire Reynolds for $65 a share in Alcoa
stock. You did not pursue this transaction which today is worth over $100 per
Reynolds share based on the appreciation in Alcoa's shares since their proposal
was made. Alcoa's letter to you yesterday indicates that the trading ratio of
the two stocks over the past three years has been 1.58 excluding any control
---------
premium for Reynolds. At yesterday's closing price of 66 7/16 for Alcoa, this
would also imply a price for Reynolds of well over $100 per share.
By not being proactive, you have allowed Alcoa to capitalize on the following
three factors:
. Dissatisfaction amongst Reynolds' shareholders;
. Yesterday's announcement of the Alcan/Pechiney/Algroup merger,
effectively removing these three potential bidders for Reynolds; and
. The market reaction to the three-way merger, which gave Alcoa the
opportunity to propose a lower exchange ratio.
On behalf of all Reynolds shareholders we demand that you immediately form a
special committee of independent directors with its own counsel and instruct
Merrill Lynch to conduct an open auction for Reynolds. Your shareholders deserve
nothing less and will hold you accountable if you fail to take this action now.
A `just say no' response and the status quo is not an option.
We look forward to your response.
Sincerely,
/s/ Richard L. Grubman
Richard L. Grubman
Managing Director
